Laos is a landlocked nation that China, Cambodia, Myanmar, Thailand and Vietnam border. To date, it remains one of the poorest countries in Southeast Asia, with a poverty rate of 18.3% in 2018 and an unemployment rate of 0.64%. While the numbers are daunting, in the past two decades, progress has occurred to reduce food insecurity and poverty in Laos while also improving the overall health of its citizens. However, Laos has faced new challenges due to the COVID-19 pandemic and the effect it has had on businesses and the country’s economy. Luckily, the World Bank and Laos Competitiveness and Trade Project are providing aid in Laos in order to aid in the country’s recovery from the COVID-19 pandemic.
The Effects of COVID-19 in Laos
To date, Laos has reported 33,606 cases of COVID-19 and 47 deaths. Vaccination rates remain strong with a population of 7.2 million people and 2,126,318 fully vaccinated. According to World Health Organization (WHO) statistics, 3,018,273 people have received at least one dose and 4,213,630 vaccine doses have been administered. If vaccine rates continue to climb, by the end of 2021, the vaccine rate will move above 50%.
The COVID-19 pandemic put a pause to all the work in progress and while the efforts to contain the pandemic have largely been successful, the impact on the economy has disproportionately impacted lower-income individuals and increased the poverty rate by 4.4 points. With help from the World Bank and neighboring countries, Laos’ quick response to the pandemic has helped minimize the blow.
The World Bank and the Laos Competitiveness and Trade Project (CTP)
The World Bank and Laos Competitiveness and Trade Project are providing aid in Laos by helping businesses recover from the economic effects of COVID-19. Thus far, the World Bank has committed more than $125 billion to more than 100 countries to alleviate the health and social stress from the pandemic. With support from the U.S., Australia and Ireland, Laos has received $19.5 million in grants through the Multi-Donor Trust Fund, an extension of the Competitiveness and Trade Project. In 2018, Laos received $13 million in grants while in 2021 Laos received $6.5 million from the fund.
The funding accompanies Laos’ quick and effective government approach to the pandemic. By cutting the cost of trade and loosening regulations, the CTP works to lessen the time goods remain in port or in transit by speeding up trade lines. Additionally, the CTP is working to improve the processes required to start and operate a business. Incentivizing people to open their own business thus stimulating the economy and reducing poverty in Laos.
According to H.E. Somchith Inthamith, Deputy Minister of Industry and Commerce, “the new financing will be used to scale up and extend activities under the original project, such as decreasing the time required for goods to clear customs and increasing the ability of our producers to connect to markets.”
Poverty in Laos like in many other countries requires a multi-faceted approach, now more than ever. Despite the raging global pandemic, the World Bank and Laos have a commitment to ensuring the citizens of Laos do not stay in the dark and receive adequate assistance. This project is ever-evolving similar to the situation on the ground. Should the COVID-19 pandemic worsen, Laos and the CTP will continue to provide aid in Laos.
– Sal Huizar